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The Government Actuary’s Department has now advised that it anticipates that the cost of accruing benefits would indeed rise above 20 per cent. of payroll. This has effectively triggered the need for the major review
recommended by the SSRB, and I will therefore be asking the SSRB to undertake such a review, supported by a panel of people with relevant expertise.
Given that the review will need to consider, amongst other things, the findings of the Government Actuary’s valuation of the PCPF which is to be completed in March 2009, the SSRB would not be expected to report before Spring next year.
Prime Minister
Review Body on Senior Salaries
The Prime Minister (Mr. Gordon Brown): The 30th report of the Review Body on Senior Salaries is being published today. This makes recommendations about the pay of the senior civil service (SCS), senior military personnel, the judiciary and very senior NHS managers. Copies have been laid in the Vote Office and the Library of the House. I am grateful to the Chairman and members of the Review Body for their work.
The Government have decided to accept all of the main recommendations of the Review Body as they are affordable and consistent with public sector pay policy. They will be implemented with effect from 1 April 2008. The cost of the awards will be met from within existing Departmental Expenditure Limits.
For the SCS, the Review Body has recommended that for the three-year period 2008-2011 there should be an indicative envelope of 7 per cent. pay bill available for normal base pay increases and additions to the pot for non-consolidated bonuses. This multi-year pay arrangement will provide certainty and stability for Departments and the workforce. The Government have decided to accept the recommended 7 per cent. envelope, but believes that the appropriate metric is pay bill per head rather than pay bill. This ensures that in the event of any changes in workforce size individual pay awards remain consistent with public sector pay policy. The envelope for SCS pay increases and bonuses over the next three years will therefore be 7 per cent. of pay bill per head.
For 2008-09, the Review Body has recommended a headline award of 1.5 per cent. and a 1 per cent. increase to the size of the bonus pot.
The Review Body has recommended that progression target rates for pay bands 1 and 1A should be retained. The Government have decided to replace them with ‘reference points’, which will serve a similar purpose but no longer have any limiting point on pay increases for serving staff.
The main recommendations of the Review Body on senior military pay are:
an increase of 2.2 per cent. in the base pay for senior military officers;
that 2- and 3-star officers (Major Generals and Lieutenant Generals, and equivalents) receive an element of the X-factor—a supplement to base pay in recognition of the differences between military and civilian life—to be phased in over three years commencing 1 April 08;
that the pay scales are restructured over the course of the next three years in order to give 1-star officers (Brigadiers and equivalents) a 10 per cent. minimum pay increase on promotion to 2-star.
The Review Body’s main recommendation for the judiciary is an increase averaging slightly over 2.5 per cent. for almost all judicial salaries.
The Review Body considered the pay of very senior NHS managers for the first time this year. It has recommended a 2.2 per cent. increase in the pay of these managers from 1 April 2008.
Members of Parliament and Ministers
Ministers’ pay is automatically linked to the average increase in the midpoint of SCS pay, which moves in line with SSRB recommendations. However, given the importance of public sector pay restraint at a time of economic uncertainty Ministers will not be accepting any pay rise in 2008-09.
There is no longer a link between the SSRB’s recommendations and the pay of Members of Parliament as there has been in previous years. My right hon. Friend the Leader of the House of Commons is making a statement today on the report into parliamentary pay and allowances, conducted by Sir John Baker, CBE.
The Government have accepted the main recommendations of the SSRB. The three-year pay award for the senior civil service will help to deliver economic stability and brings the total of public servants covered by these three-year deals to over 1.5 million.
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